Oman finalizes Italian financing for Sohar refinery modernization

Oman Oil Refineries & Petroleum Industries Co. (Orpic) has secured a $100 million loan guaranteed by Italian export credit agency SACE to finance oil and gas technology exports from Italy for use in the modernization and expansion of its 116,000-b/d Sohar refinery.

Orpic will use the loan, issued by Hong Kong & Shanghai Banking Corp. Ltd. (HSBC), to finance an engineering, procurement, and construction contract with several Italian outfits for the supply of equipment and machinery in the Sohar project, according to SACE.

The loan guarantee from SACE follows Orpic’s announcement in early May that it had signed a $2.8 billion loan agreement with a consortium of 21 international and national financial institutions to help fund the company’s projects, including the Sohar Refinery Improvement Project (SRIP) (OGJ Online, May 1, 2014).

While Orpic has said it will use the total $2.8 billion loan from the consortium—which includes SACE and HSBC—to finance other projects as well, SACE’s contribution will be used exclusively for SRIP, the credit agency said.

A brownfield project, SRIP is designed to improve the plant’s ability to overcome existing technical constraints associated with processing the changing quality of Oman Export Blend (OEB) crude, meet international environmental standards, serve growing domestic demand for refined products, and enhance the refinery’s competitiveness and profitability, according to Orpic (OGJ Online, Mar. 31, 2014; Nov. 25, 2013; Mar. 4, 2011).

In addition to revamping the refinery’s residue fluidized catalytic cracker unit to improve the quality and quantity of gasoline, diesel, naphtha, and propylene production from the plant, SRIP also will involve integrating five new units at the refinery, including a hydrocracker and coker.

Orpic expects SRIP, once completed, will boost the Sohar refinery’s crude throughputs by 70% by adding 82,000 b/d of new OEB crude oil processing capacity to achieve a total refining capacity of 198,000 b/d, the company has said (OGJ Online, May 1, 2014).